Company Decision-making, Officers, and Shareholders

This flashcard set covers the key vocabulary and statutory thresholds from the lecture notes on company decision-making, officer roles (directors, secretaries, auditors), and shareholder rights and protections.

Board resolutions

Decisions made collectively by directors in board meetings, generally passed by a simple majority vote ($MA\text{ }7$).

Model Article 3 ($MA\text{ }3$)

The provision that sets out the directors' authority to run the company on a day-to-day basis.

Quorum (Board Meeting)

The minimum number of directors who must be present for a meeting to be valid; under $MA\text{ }11$, this is usually $2$ directors.

Model Article 14 ($MA\text{ }14$)

A rule stating that a director may not count in the quorum or vote if a proposed decision of the board is concerned with an actual or proposed transaction with the company in which they are interested.

Ordinary resolution

A shareholders' resolution passed by over half (over $50\%$) of the votes cast at a general meeting ($s\text{ }282$ CA $2006$).

Special resolution

A shareholders' resolution requiring $75\%$ or more of the votes cast at a general meeting to be in favor ($s\text{ }283$ CA $2006$).

$14$ clear days

The minimum notice required for a general meeting, where the day notice is deemed received and the day of the meeting itself are not counted ($s\text{ }307$ CA $2006$).

Poll vote

A voting method in a general meeting where shareholders vote on the basis of one vote for each share they own, rather than one vote per person ($MA\text{ }44(2)$).

Short notice (General Meeting)

A meeting held with less than $14$ days' notice, valid only if a majority in number of shareholders holding $90\%$ or more ($95\%$ for public companies) of the voting shares consent.

Written resolution

An alternative to a general meeting for private companies where a resolution is passed when the required majority of all eligible members signify agreement in writing ($s\text{ }288$ CA $2006$).

Lapse date

The deadline for returning a written resolution, which is $28$ days from circulation unless the articles state otherwise ($s\text{ }297$ CA $2006$).

Requisitioning a general meeting

The right of shareholders representing at least $5\%$ of paid-up shares with voting rights to require the directors to call a general meeting ($s\text{ }303$ CA $2006$).

SAIL

Single Alternative Inspection Location; an address other than the registered office where a company may keep its statutory books.

Small company

A company with a balance sheet total of not more than $£7.5\text{ million}$, turnover of not more than $£15\text{ million}$, and no more than $50$ employees ($s\text{ }382$ CA $2006$).

Micro-entity

A company with a balance sheet total of not more than $£500,000$, turnover of not more than $£1\text{ million}$, and no more than $10$ employees ($s\text{ }384A$ CA $2006$).

Confirmation statement (Form $CS01$)

A filing that must be made within $14$ days of the anniversary of incorporation to ensure Companies House records are up-to-date ($s\text{ }853A$ CA $2006$).

Company secretary

An officer responsible for legal administration; optional for private companies but mandatory for public limited companies ($s\text{ }271$ CA $2006$).

Auditor

A qualified, independent accountant whose main duty is to report on the company's annual accounts to shareholders ($s\text{ }495$ CA $2006$).

PSC register

The Register of People with Significant Control, identifying individuals who own or control more than $25\%$ of shares or voting rights.

Bushell v Faith clause

A provision in the articles giving a shareholder weighted voting rights on a resolution to remove them as a director.

Subsidiary

A company controlled by a holding company through a majority of voting rights or the power to appoint/remove a majority of its board ($s\text{ }1159(1)$ CA $2006$).

Cumulative preference shares

Shares that entitle the holder to be paid missed dividends from previous years before any dividends are paid to ordinary shareholders.

Unfair prejudice petition

A legal action under $s\text{ }994$ CA $2006$ where a shareholder applies for a court remedy because the company's affairs are being conducted in a manner harmful to the members' interests.

Derivative claim

A claim instigated by a shareholder for a wrong done to the company arising from a director's negligence, default, or breach of duty ($ss\text{ }260\text{--}264$ CA $2006$).

Appointing a new director

Ordinary resolution by shareholders and company should file notice of appointment of director with the Registrar of companies

Transaction at undervalue

A transaction where a company sells assets for significantly less than their market value, potentially impairing the interests of creditors and shareholders.

Substantial Property transaction

A transaction involving a company's substantial assets, requiring shareholder approval due to potential implications on the company's financial position.

Filing of Minutes of board meetings and general meetings

Should be kept at the companies registered office or SAIL

SAIL

Single Alternative Inspection Location

Filing of resolution removing company director

Form TM01 and must be sent within 14 days of date of termination

Notice to a General Meeting called if emailed or posted

14 clear days with an additional 48 hours

Minimum execution formalities required in order for a loan agreement to be binding on a company

Signed by a person acting under its authority express or implied

Minimum perentage of votes to hold a general meeting at short notice

At least 90% or more